While this week’s automotive sector reports helped push the markets down, the big loser on the day appears to be Ford Motor Company (NYSE:F). But don’t let bad news get you down.
Ford stock fell more than 2% Tuesday after the world’s leading auto manufacturers reported February sales figures. Not surprisingly, the wicked winter in much of the U.S. was to blame for manufacturers not meeting analysts’ unrealistically bullish sales expectations.
Analysts had expected the industry to increase sales for the month by a whopping 7.1%, despite the awful weather. The industry turned in a 5.3% increase, selling 1.26 million vehicles.
But more interesting than the overall number was that Ford was the only one of the seven automakers to report a drop in sales for the month, seeing sales fall by 2%. Analysts were expecting a 5.8% increase in Ford sales.
The other major U.S. automaker, General Motors Company (NYSE:GM), saw a 4% increase in February, and foreign automakers did just as well. Nissan Motor Co Ltd (ADR) (OTCMKTS:NSANY) was up 3%; Honda Motor Co Ltd (ADR) (NYSE:HMC) was up 5%, and Fiat Chrysler Automobiles NV (NYSE:FCAU) was up 6%.
Not surprisingly, Toyota Motor Corp (ADR) (NYSE:TM) carried the freight for the rest of the industry, seeing a 13% increase for the month.
Ford Stock Outlook
While F stock is up more than 3% for the year, outperforming the S&P 500 in that time, it continues to lag behind its competitors — GM, TM and HMC are all up between 8% and 12% through the first couple months of the year.
But there are better times ahead for Ford.
After all, this winter can’t last forever, can it? Nobody wants to buy a car this time of year, but within the month we should start seeing warmer days, less snow and longer spring evenings. I expect to see Ford sales rebound by the time the company’s quarterly earnings are released in April, and F stock prices bounce back as well — just like they did last spring.
Ford stock also is poised to benefit from a year of planning and retooling that led to soft sales a year ago. Inventories for the automaker have been down since mid-2014 as Ford makes the big switch to aluminum-bodied F-150 trucks — a change that will reduce the weight of the F-150 by 700 pounds while making it more efficient and easier to drive. And early reviews have been promising.
In January, Ford had its best monthly sales of the F-150 since 2004 — despite the vehicle only being available for 12 days during the month. Ford is in the process of bringing a second assembly plant on line to for the F-150 and is training more employees on its manufacturing, so its reasonable to expect sales and profits to continue to improve this spring. The company’s inventories are expected to be replenished by this June.
The stage is set for Ford to have a strong spring. Look for the stock price to tick upward as temperatures rise and production increases.
Patrick Sanders is Deputy Managing Editor of Investorplace.com. As of this writing, he held no position on any of the aforementioned securities. Follow him on Twitter @1patricksanders
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